US yields climb on strong jobs data; market prices out July rate cut

NEW YORK – US Treasury yields advanced on Thursday after data showed the world’s largest economy created more jobs than expected last month, supporting the Federal Reserve’s patient stance on cutting interest rates this year.

In afternoon trading, US two-year yields, which track interest rate expectations, rose 9.7 basis points (bps) to 3.888%, and up 14.6 bps for the week, its largest weekly rise since early April. The benchmark 10-year yield, on the other hand, gained 5.3 bps to 4.346%. On the week, the 10-year yield advanced 6.3 bps, on track for its largest weekly gain in roughly a month.

Volume has thinned, however, following the nonfarm payrolls report, with US bond markets closed on Friday for the July 4th holiday.

On the political front, Republicans in the US House of Representatives advanced President Donald Trump’s massive “One Big Beautiful Bill” toward a final yes-or-no vote on Thursday, overcoming internal party divisions over its cost.

The bill, if approved, would raise the debt ceiling by USD 5 trillion, which will allow the US Treasury to increase bill auction sizes in the coming weeks.

But Thursday’s jobs report was the market’s focus.

The report showed US nonfarm payrolls increased by 147,000 jobs last month after an upwardly revised 144,000 gain in May. Economists polled by Reuters had forecast payrolls rising 110,000 following a previously reported 139,000 gain in May.

The unemployment rate fell to 4.1% from 4.2% in May. Economists had expected the jobless rate to tick up to 4.3%.

The headline numbers, however, obscure weaker details of the report, analysts said.

Stan Shipley, fixed income strategist at Evercore ISI, pointed to state and local government employment accounting for 50% of the overall gain. He also added that private service job gains were only 68,000 and private goods producing jobs advanced just 6,000, while temporary employment slipped.

The odds of a July cut shrank to 4.7% after the jobs data, from about 25% before the report’s release. Chances of a September easing also dropped to 75%, compared with 98% just before.

There were only about 50 bps rate declines priced in 2025, from about 67 bps before the report.

“You look at it at the headline number level and conclude that the fears around the softer labor markets to this point have continued to be worse than the reality,” said Jim Baird, chief investment officer, at Plante Moran Financial Advisors in Southfield, Michigan.

“The job market appears to be hanging in there. I’d say that you have to look at the next layer of the data and when you see the pretty marked slowdown in job creation in the private sector, there is still a cautionary note there.”

The yield curve flattened after the data, with the spread between two-year and 10-year yields at 45.4 bps compared with 49.2 bps late Wednesday, as the bond market priced in a likely delay in Fed easing.

US Treasury Secretary Scott Bessent said if the Fed does not cut interest rates soon, any potential easing in September could be higher.

Other economic data on Thursday such as weekly jobless claims and services sector index showed a still solid economy. Initial claims fell to 233k in the last week of June, the lowest since mid-May, from 237,000 in the previous week, suggesting that the layoff rate remained low.

US services sector activity, on the other hand, picked up in June as orders rebounded, but employment contracted for the third time this year, underscoring the impact of policy uncertainty on businesses.

The Institute for Supply Management’s (ISM) non-manufacturing purchasing managers index (PMI) increased to 50.8 last month from 49.9 in May. Economists polled by Reuters had forecast the services PMI rising to 50.5.

(Reporting by Gertrude Chavez-Dreyfuss; Additional reporting by Medha Singh in Bengalaru; Editing by Alex Richardson, Chizu Nomiyama, Nick Zieminski, and Cynthia Osterman)

S&P 500, Nasdaq close at records on jobs data; Nvidia market cap nears USD 4 trillion

NEW YORK – Wall Street rallied on Thursday to record closing highs, as chipmaker Nvidia rose closer to a USD 4 trillion valuation and a surprisingly strong US jobs report cheered investors, who shrugged off dimming chances for an interest rate cut this month.

The S&P 500 and Nasdaq closed at record highs, notching a third week of gains. The Dow closed up 0.77%, only 0.41% away from its own record.

Chipmaker Nvidia rose 1.3%, putting its market capitalization at USD 3.89 trillion. The company is close to overtaking Apple’s all-time record and becoming the world’s most valuable company in history.

Trading volume was light in a shorter session on the eve of Friday’s US Independence Day holiday.

“We are seeing a real bout of irrational exuberance; the stock market is very biased towards optimism,” said Kristina Hooper, Chief Market Strategist at Man Group in New York.

“But there’s some basis for it. I think there is some level of relief because the jobs report was not as weak as it could have been.”

The rally has been fueled by retail investors, who are largely ignoring the inflationary pressure on the horizon, uncertainty around tariffs and “are focused on the tangible, which is today’s jobs report,” she said.

The S&P 500 gained 51.94 points, or 0.83%, to 6,279.36 and the Nasdaq Composite gained 207.97 points, or 1.02%, to 20,601.10. The Dow Jones Industrial Average rose 344.11 points, or 0.77%, to 44,828.53.

Data showed nonfarm payrolls increased by 147,000 jobs last month, 33% more than the 110,000 jobs forecasted by economists polled by Reuters. Unemployment fell to 4.1% last month, a better result than the 4.3% expected.

Traders quickly priced out chances of an interest-rate cut in July, with the odds of a 25-basis-point reduction in September at 68%, according to CME Group’s Fedwatch tool, down from 74% a week ago.

After markets closed, Republicans in the US House of Representatives approved President Donald Trump’s massive tax-cut and spending bill, an expected outcome.

The legislation will add USD 3.4 trillion to the nation’s USD 36.2 trillion debt, according to the nonpartisan Congressional Budget Office, and will also push millions of Americans off health insurance.

Large tax cuts and increased government spending can boost demand in the economy. This can add inflationary pressure, especially when the economy shows signs of strength, such as the latest jobs report.

“Some data points, like the jobs report, are positive and charming. But if we just take a step back, the picture is not that great,” said Alex Morris, CEO of F/m Investments, which manages USD 18 billion in Washington, D.C.

For the week, the S&P 500 gained 1.72%, the Nasdaq rose 1.62%, and the Dow climbed 2.3%. The Russell 2000 Small Cap index rose 3.41%.

“It’s kind of perplexing,” Morris said. “This feels like that last bull rush before all of the data really comes together.”

Tripadvisor climbed 16.7% after the Wall Street Journal reported activist investor Starboard Value had built a stake of more than 9% in the online travel company.

Datadog jumped 14.9% after the cloud security firm was set to replace Juniper Networks on the S&P 500.

Markets closed at 1 p.m. ET. Trading volume on US exchanges was 10.85 billion shares, much lighter than the 17.82 billion average for the full session over the last 20 trading days.

(Reporting by Sabrina Valle In New York, Sruthi Shankar in Bengaluru; Editing by Pooja Desai and David Gregorio)

Gold falls 1% as strong US payrolls data douses rate cut hopes

Gold fell 1% on Thursday as stronger-than-expected US payroll data cemented expectations that the Federal Reserve is unlikely to cut interest rates as early as previously anticipated, denting the metal’s appeal.

Spot gold fell 0.9% to USD 3,328.63 per ounce as of 0200 p.m. EDT (1800 GMT), after falling over 1% earlier in the session.

US gold futures settled 0.4% higher at USD 3,342.9.

The dollar and US stock index futures rose after non-farm payrolls increased by 147,000 jobs last month, the Labor Department’s Bureau of Labor Statistics showed. Economists polled by Reuters had forecast payrolls rising 110,000.

A stronger dollar makes bullion more expensive for overseas buyers.

“The better than expected jobs number means we see a lesser likelihood of a Fed rate cut earlier than currently anticipated. As a result, the dollar strengthened, which is adding pressure to the gold market,” said David Meger, director of metals trading at High Ridge Futures.

“The key is the fact that the idea or possibility of a July rate cut is off the table.”

Investors are now pricing in 51 basis points of Federal Reserve rate cuts by the end of the year, starting in October, down from around 66 basis points expected prior to the report.

Non-yielding gold tends to perform well in a low-interest-rate environment.

On the trade front, an agreement between the United States and Vietnam was announced on Wednesday ahead of a July 9 deadline when US tariffs are set to take effect.

Meanwhile, Republicans in the US House of Representatives advanced Trump’s massive tax-cut and spending bill, estimated to potentially add USD 3.4 trillion to the nation’s debt, toward a final yes-or-no vote.

“As the indebtedness of the US continues to grow, investors might become more concerned about the US dollar, which should benefit gold in the longer-term,” said Carsten Menke, an analyst at Julius Baer.

Spot silver was up 0.7% at USD 36.84 per ounce, while platinum lost 3.1% to USD 1,374.89 and palladium shed 1.5% to USD 1,137.69.

(Reporting by Anushree Mukherjee in Bengaluru; Additional reporting by Sarah Qureshi; Editing by Philippa Fletcher, Tasim Zahid, and Cynthia Osterman)

Dollar gains after strong US jobs data stretches market hopes of Fed cut

NEW YORK – The US dollar rose against major currencies, including the yen, euro and Swiss franc on Thursday, after data showing the US economy created more jobs than expected, signalling that the Federal Reserve might take longer to cut interest rates.

The dollar strengthened 0.94% to 145.075 versus the Japanese yen and was up 0.39% to 0.7955 against the Swiss franc. The US currency is on track to notch a second consecutive session of gains against both safe-haven currencies.

The euro was 0.41% weaker at USD 1.175350. It is on track for the second straight day of losses.

US Labor Department data on Thursday showed that nonfarm payrolls increased by 147,000 jobs in June. Economists polled by Reuters had forecast a rise of 110,000. The report was published a day early because of the July 4 US Independence Day holiday.

“It will be very difficult for the Fed to cut rates in this environment, with the labor market so strong,” said Axel Merk, president and chief investment officer at Merk Hard Currency Fund in California. “The argument that Jerome Powell has made for the Fed to stay on the sidelines continues to hold.”

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.40% to 97.135, on track for two straight sessions of gains, although it is still near multi-year lows.

The rise in the dollar following the data was accompanied by an increase in US Treasury yields. The two-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 9.7 basis points to 3.789%. The yield on benchmark US 10-year notes rose 5.5 basis points to 4.348%.

Wall Street stock indexes gained, with the benchmark S&P 500 index and the Nasdaq hitting a fresh record high on the session.

“The US economy right now is on the roll to outperform through the rest of the year, that’s why we’re seeing such a strong response over the past three weeks in the equities,” said Joseph Trevisani, senior analyst at FX Street. “The dollar has weakened about 13% against the euro since February. A lot of that has been driven by speculation that the Fed will sooner or later cut rates.”

He said Thursday’s economic report had put an end to those expectations.

Market expectations that the Fed will leave rates unchanged at its July meeting rose to a 95.3% probability, up from 76.2% a day ago, according to the CME’s Fedwatch tool.

Republicans in the US House of Representatives passed President Donald Trump’s massive tax-cut and spending bill on Thursday, sending it to Trump to sign into law.

Treasury Secretary Scott Bessent said in a Bloomberg interview he expects a flurry of trade deals before the July 9 deadline, when the temporary pause of the so-called “Liberation Day” tariffs expires.

The US has lifted restrictions on exports to China for chip design software developers and ethane producers, a sign of easing trade tensions between the countries. The dollar strengthened 0.14% to 7.17 versus the offshore Chinese yuan.

The British pound rose after losing ground in the previous session following a selloff in gilts. British Prime Minister Keir Starmer’s office backed finance minister Rachel Reeves, easing concerns over her future. The pound strengthened 0.07% to USD 1.3646.

(Reporting by Chibuike Oguh in New York. Editing by Alex Richardson, Mark Potter, and Sharon Singleton)

Oil falls on signs of weak US demand ahead of key jobs report

Oil prices eased on Thursday, reversing gains from the previous session, on concerns over weak US demand after government data showed a surprise build in inventories in the world’s biggest crude consumer.

Brent crude futures fell 24 cents, or 0.35%, to USD 68.87 a barrel by 0044 GMT after gaining 3% on Wednesday. US West Texas Intermediate crude fell 24 cents, or 0.36%, to USD 67.21 a barrel after climbing 3.1% previously.

The US Energy Information Administration said on Wednesday domestic crude inventories rose by 3.8 million barrels to 419 million barrels last week. Analysts in a Reuters poll had expected a drawdown of 1.8 million barrels.

Gasoline demand dropped to 8.6 million barrels per day, prompting concerns about consumption in the peak US summer driving season.

Both benchmarks gained on Wednesday after Iran enacted a law suspending cooperation with the UN nuclear watchdog, raising concerns the lingering dispute over the Middle East producer’s nuclear program may once again devolve into armed conflict.

Additionally, the US and Vietnam reached a trade deal that sets 20% tariffs on many of the Southeast Asian country’s exports, giving investors a sense of greater economic stability on international trade which could flow into higher demand for oil.

The market will be watching the release of the key US monthly employment report on Thursday to shape expectations around the depth and timing of interest rate cuts by the Federal Reserve in the second half of this year, analysts said.

Lower interest rates could spur economic activity, which would in turn boost oil demand.

A private payrolls report on Wednesday showed a contraction for the first time in two year though analysts cautioned there is no correlation between it and the government data.

(Reporting by Nicole Jao; Editing by Christian Schmollinger)

Gold falls after US-Vietnam trade deal; US payroll data eyed

Gold prices declined on Thursday after a US-Vietnam trade deal eased tensions, while investors awaited the US payroll data later in the day for clues about the Federal Reserve’s policy path.

FUNDAMENTALS

* Spot gold lost 0.3% to USD 3,345.57 per ounce as of 0029 GMT, while US gold futures fell 0.1% to USD 3,356.60.

* The US will impose a lower-than-promised 20% tariff on various goods from Vietnam, President Donald Trump announced on Wednesday. The Southeast Asian nation is the US’s tenth-largest trading partner.

* Meanwhile, US and India negotiators pushed to finalise a tariff-reducing deal ahead of Trump’s July 9 deadline. However, disagreements around US dairy and agricultural exports remained unresolved, sources familiar with the talks said.

* Trump has indicated no signs of extending the negotiation deadline despite stalled discussions with Japan, another key trade partner, but expressed optimism about an India deal.

* Data released by ADP showed US private payrolls dropped by 33,000 jobs in June, marking the first decline in more than two years, as economic uncertainty hampered hiring. Meanwhile, low layoffs continued to anchor the labour market.

* Investors are now awaiting the non-farm payrolls report on Thursday, which is expected to show an addition of 110,000 jobs in June, down from 139,000 in May, according to a Reuters poll.

* The market currently anticipates a 66-basis-point rate cut by the Fed this year between September and December.

* Non-yielding gold tends to perform well during economic uncertainty and in a low-interest-rate environment.

* Meanwhile, Republicans in the House of Representatives struggled to pass Trump’s massive tax cut and spending bill as a handful of hardliners withheld support over concerns about its cost.

* Spot silver fell 0.6% to USD 36.36 per ounce, platinum lost 0.5% to USD 1,412.13 and palladium shed 0.4% to USD 1,150.28.

DATA/EVENTS (GMT)
0030	Japan JibunBK Comp Op, SVC PMI Final SA June
0145	China Caixin Services PMI June
0750	France HCOB Services, Composite PMI June
0755	Germany HCOB Services, Composite Final PMI June
0800	EU HCOB Services, Composite Final PMI June
0830	UK S&P GLOBAL PMI: COMPOSITE – OUTPUT June
0830	UK Reserve Assets Total June
1230	US Non-Farm Payrolls, Unemployment Rate, Average Earnings YY June
1230	US International Trade USD May
1230	US Initial Jobless Clm 28 June, w/e
1345	US S&P Global Comp, Svcs PMI Final June
1400	US Factory Orders MM May
1400	US ISM N-Mfg PMI June
1430	US EIA-Nat Gas Chg Bcf 27 June, w/e
1430	US Nat Gas-EIA Implied Flow 27 June, w/e

(Reporting by Anmol Choubey in Bengaluru; Editing by Sumana Nandy)

Emerging market debt sale surge defies global turmoil amid signs of de-dollarisation

LONDON/DUBAI – Emerging market debt sales boomed in the first half of the year, defying tariff tantrums, missile attacks and gyrating oil prices, on track for another year of records – and with nascent signs of a shift away from the dollar, bankers told Reuters.

Cash-rich investors keen for margins – and to diversify their portfolios – hardly paused their buying spree even during US President Donald Trump’s “Liberation Day” sweep of tariff announcements or Israel’s attacks on Iran.

Record supplies of new bonds could continue, with low oil prices driving exporting countries to keep borrowing to fund spending.

“What is astonishing this year is how markets … were still active, if not very active, in the toughest moments of the globe,” said Alexis Taffin de Tilques, global head of emerging markets sovereigns and head of Central and Eastern Europe, Middle East and Africa debt capital markets with BNP Paribas.

“The volumes of issuance have been incredible.”

Stefan Weiler, head of debt capital markets for CEEMEA at JPMorgan, said debt sales in the group of regions surpassed USD 190 billion in the first half of the year, on course to beat last year’s all-time record of USD 285 billion.

The surge is another sign of investor interest in emerging market assets in a year that has been marked by the sort of turmoil that typically sends investors fleeing for safe-havens.

“Investors are very cash rich … eagerly looking to deploy their cash in the primary market,” said Weiler, predicting that if oil prices fell, issuance from the Middle East and North Africa could rise further.

The Gulf, led by behemoth Saudi Arabia, issued just over 40% of CEEMEA debt, bankers said, as companies and countries took advantage of a dip in interest rates and the expectation that US Treasury yields would remain elevated for some time.

“It has been definitely a record first half of issuances this year” for the Middle East, said Khaled Darwish, head of CEEMEA Debt Capital Markets at HSBC, calculating that Middle East issuers had raised bond and sukuk deals worth USD 106 billion so far this year, compared with USD 139 billion for the whole of 2024.

“The impact of all the geopolitical developments that happened this year has been quite minimal on the GCC market,” he added.

Geopolitical upheaval has even helped demand for certain issues. Investors who may once have been cautious about defence companies have become keener in response to higher military spending in NATO countries following Russia’s invasion of Ukraine. Czech defence and industrial company CSG more than doubled its dual-tranche 2031 bond issue to 1 billion euros and USD 1 billion in response to strong investor demand.

DIVERSIFICATION

Fixed-income investment is better shielded from geopolitical turmoil than equity markets, Taffin de Tilques said. Weiler said crossover investors are keen for the bigger margins emerging market debt offers.

Citi’s debt finance team said global emerging-market issuance volumes were up 20% year-on-year for the first half of 2025, with corporate issuance growing particularly quickly.

While much of it is refinancing, new issuers have joined the fray such as Saudi mining giant Maaden, with a sukuk worth USD 1.25 billion, and Angola’s Azul Energy, which debuted with a USD 1.2 billion bond.

Victor Mourad, Citi’s co-head of CEEMEA debt financing, said the growing list of debut issuers offered investors diversification.

Darwish and Weiler said there are also more governments and corporates turning to other currencies – chiefly the euro – to diversify away from the dollar.

Saudi Arabia issued in euros this year, as did Sharjah in the United Arab Emirates. Weiler said other currencies were being explored too, from Japanese yen to “Panda bonds” issued on China’s domestic market in yuan. Uruguay sold its first sovereign bond in Swiss francs.

“There’s definitely a theme among global issuers currently exploring more non-USD financing alternatives as borrowers are seeking to achieve less reliance on USD-denominated funding,” Weiler said, adding it was an early sign of de-dollarisation. “I think it’s the start of a clear trend.”

Mourad said the other notable trend was a move away from 30-year issues; he said there were only two 30-year transactions from the CEEMEA region in the first half of the year. Yield curves have become steeper globally, making longer-term issues more costly to governments and corporates than before.

“The long end supply has been replaced by a surge in volumes for three-year transactions as issuers took a view on short-term rates,” Mourad said.

(Reporting by Libby George in London and Federico Macconi in Dubai; Editing by Karin Strohecker and Peter Graff)

US dollar rises, British pound falls as markets weigh trade deals, Fed rate cut

NEW YORK – The US dollar rose against major currencies on Wednesday as data supported market expectations of a Federal Reserve interest rate cut, while the pound sterling fell amid a selloff in British government bonds.

Traders were also positioning ahead of the Labor Department’s employment report for June, due to be released on Thursday, and the July 4 holiday.

The dollar had lost ground briefly but regained momentum after the ADP National Employment Report showed US private payrolls fell for the first time in more than two years in June, suggesting the Fed might cut rates as soon as September.

President Donald Trump’s massive tax-cut and spending bill passed the US Senate on Tuesday by the narrowest of margins, which is expected to add USD 3.3 trillion to the national debt. Debate over the legislation has now returned to the House of Representatives.

Trump announced Vietnam had struck a trade deal with the US, which lowers planned tariffs and could push other countries to reach similar agreements on duties ahead of the July 9 deadline for higher tariffs to kick in.

“I think the market logic is if nobody agrees to a deal, then the pressure is on the US and that’s dollar negative because it serves to adjust everything, including the fiscal bill since the tariffs are in the background even if they are not formally in the bill,” said Steve Englander, head of global G10 FX Research at Standard Chartered.

“But if you get countries settling, it’s the countries that are left out that are in trouble. It’s becomes risk positive generally because you’re comfortable that there will be (trade) deals.”

The dollar was up 0.15% to 143.635 against the Japanese yen, on track to snap two straight sessions of losses. It was up 0.06% to 0.79150 against the Swiss franc, on track for gains after seven consecutive sessions of declines.

“The dollar is bouncing against G10 currencies, and it’s not coincidental as it is coming with almost a 20 basis point rise in US interest rates,” said Marc Chandler, chief market strategist at Bannockburn Global Forex LLC.

British bonds suffered their worst selloff since October 2022, the day after the government sharply scaled back plans to cut benefits and there was speculation about the future of the country’s finance minister. Sterling GBP= weakened 0.79% to USD 1.3634 against the dollar, dropping to a one-week low and poised to snap two straight sessions of gains.

“It’s not just the British pound that is sharply lower but the gilts are under a lot of pressure as well. I think it’s just a crisis of confidence in the Labour government,” Chandler added.

The euro fell 0.08% to USD 1.179725 against the dollar but gained 0.9% versus the pound sterling.

Eurozone inflation edged up last month to the European Central Bank’s 2% target, confirming the era of runaway prices is over and likely shifting policymaker focus to tariff-related volatility.

The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.154% to 96.786, on track to snap nine straight sessions of losses. The index was still trading at multi-year lows after having its worst half-year since the 1970s, weighed by trade uncertainty.

The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 1.2 basis points to 3.789%, reversing earlier losses.

The Canadian dollar strengthened 0.35% versus the greenback to C$ 1.36 per dollar. The dollar strengthened 0.03% to 7.161 versus the offshore Chinese yuan.

(Reporting by Chibuike Oguh in New York; Additional reporting by Kevin Buckland; Editing by Chris Reese and Nick Zieminski)

Nikkei ends five-day winning run as US-Japan trade talks weigh

TOKYO – Japan’s Nikkei share average snapped a five-day winning streak to fall more than 1% on Tuesday, as investors sold stocks amid uncertainty over US-Japan trade talks.

The Nikkei fell 1.24% to 39,986.33, slipping from the highest level since mid-July, which it reached in the previous session.

The broader Topix slipped 0.73% to 2,832.07.

“The market was overheated, but there were some factors that boosted demand last month,” said Hiroyuki Ueno, chief strategist at Sumitomo Mitsui Trust Asset Management.

Japanese equities mirrored a rally in US stocks in the past several sessions, but demand was also supported by dividend payouts investors received after corporate shareholders’ meetings in June, as well as corporate share buybacks, said Ueno.

The Nikkei rose 6.6% in June, marking its biggest monthly gain since February 2024. In the last five sessions of June, the index gained 5.5%.

The Relative Strength Index (RSI), a technical measure for investment momentum, dropped to 66.6 on Tuesday from the “overbought” condition of 74.5.

Meanwhile, US President Donald Trump expressed frustration with US-Japan trade negotiations on Monday, casting clouds over ongoing trade talks between the two countries.

US Treasury Secretary Scott Bessent also warned that countries could be notified of sharply higher tariffs as a July 9 deadline approaches despite good-faith negotiations.

“Investors weighed trade factors, but if the outlook of the talks becomes clear, then the market gauges stocks with fundamentals and the Nikkei has the potential to rise further,” said Ueno.

Uniqlo-brand owner Fast Retailing fell 4.16% to drag the Nikkei the most. Chip-equipment maker Tokyo Electron slipped 2.2%.

Bucking the trend, utility Tokyo Electric Power Holdings jumped 9.98% to become the biggest percentage gainer on the Nikkei.

(Reporting by Junko Fujita; Editing by Harikrishnan Nair and Vijay Kishore)

Oil settles up on signs of strong demand, investors await OPEC+ decision

NEW YORK – Oil prices edged higher on Tuesday as investors took stock of positive demand indicators, while also treading cautiously ahead of an OPEC+ meeting to decide the group’s August output policy.

Brent crude settled up 37 cents, or 0.6%, at USD 67.11 a barrel, while US West Texas Intermediate crude settled 34 cents higher, or up around 0.5%, at USD 65.45 a barrel.

The gains were likely due to supportive data from a private-sector survey in China, which showed factory activity returned to expansion in June, said Randall Rothenberg, a risk intelligence expert at US oil brokerage Liquidity Energy.

Expectations that Saudi Arabia will raise its August crude oil prices for buyers in Asia to a four-month high as well as firm premiums for Russian ESPO Blend crude oil were also supporting the notion of robust demand, Rothenberg said.

Oil’s gains were kept in check by expectations that the OPEC+ group will boost its August crude oil output by an amount similar to the outsized hikes agreed in May, June, and July. Four OPEC+ sources told Reuters last week the group plans to raise output by 411,000 barrels per day next month when it meets on July 6.

“All eyes will be on OPEC+’s decision over the weekend, when the group is expected to add another 411,000 bpd of production in an effort to gain more market share, primarily over the US shale producers,” StoneX energy analyst Alex Hodes told clients.

Besides gaining market share from US shale producers, which pumped oil at a record pace in April, according to official data released on Monday, the group has also been trying to punish overproducing members.

OPEC+ member Kazakhstan, one of the world’s 10 largest oil producers, raised oil production last month to match an all-time high, a source familiar with the data told Reuters on Tuesday.

Saudi Arabia, the de facto leader of the OPEC+ group, raised its June crude oil exports to the fastest rate in a year, data from Kpler showed.

“These exports are flooding out even faster than the OPEC+ deal implies during the summer, when peak domestic demand typically keeps oil supplies closer to home,” Hodes said.

In the US, crude oil inventories rose by 680,000 barrels in the past week, according to sources citing figures from the American Petroleum Institute. Official data from the Energy Information Administration is due Wednesday at 10:30 a.m. ET.

Investors are also watching trade negotiations ahead of US President Donald Trump’s tariff deadline of July 9. Trump on Tuesday said he is not thinking of extending the deadline.

A trade deal with India was very close, Treasury Secretary Scott Bessent said on Tuesday. Trump also said the US will possibly have a deal with India, but he added that he doubts there will be a deal with Japan.

Bessent also warned countries could be notified of sharply higher tariffs despite good-faith negotiations as the July 9 deadline approaches, when tariff rates are scheduled to revert from a temporary 10% level to the ones Trump announced on April 2 and then suspended.

The European Union wants immediate relief from tariffs in key sectors as part of any trade deal with the US, EU diplomats told Reuters.

(Reporting by Shariq Khan, Anjana Anil, Jeslyn Lerh, and Enes Tunagur. Editing Paul Simao and Nick Zieminski)

2024 Mid-Year Economic Briefing: Navigating the Easing Cycle

Investing with Love: A Mother’s Guide to Putting Money to Work

Investor Series: An Introduction to Estate Planning

Policy rate views: Fed expected to do baby steps

Inflation Update: Faster but full-year average within target